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Directional Audio Coding (DirAC) is a perceptual method for reproducing spatial audio using existing microphones and surround sound configurations. In the analysis phase, the direction and diffuseness are continuously estimated in frequency bands. This information, together with input signals remapped into a set of virtual microphones corresponding to the reproduction configuration, is used to recreate the spatial audio experience in the listening setup. Subjective listening tests in both an anechoic chamber and in a standard listening room showed that the mean opinion scores were almost always good to excellent, which is higher quality than traditional techniques.